Friday, November 18, 2011

Ducks on the pond - the uncertain path of the nuclear renaissance

Sometimes there is real progress and sometimes not so much

Like a baseball team that strands players on base in scoring position at the end of an inning, usually from a pop fly after a 3-2 count, the global nuclear industry sometimes leaves analysts gasping for air.

On the other hand, occasionally, there is a brilliant play that sends runners to score.  The baseball term "ducks on the pond" means there are players in scoring position, usually at 1st and 3rd.

Here are some the latest examples.
Czech plans more reactors, but loses a key leader

The Czech Republic state-owned utility CEZ expects to add one more nuclear reactor to its power station at Dukovany according to CEO Daniel Benes.  He added it is unlikely it will build more than one additional unit due to limits on water supply.

CEZ has released technical documentation to three bidders for two new reactors at its Temelin site. Bids are due by July 2012.  The bidders are Areva, Atomstroyexport, and Westinghouse.

In addition to reactor projects in the Czech Republic, CEZ is working on a new reactor for Slovakia.  The firm has plans to build a "third-generation" reactor at Jaslovske Bohunice.  Getting investors for the project is the major focus of the effort as CEZ does not want a majority financial position.  Another factor is timing to insure that capital requirements for this project don't conflict with a planned reactor at Dukovany.

So CEZ is looking for investors on the Slovakia side of the project to reduce its overall capital requirements and its risk.  According to a financial wire service report, CEZ is on the hook for now invest {e}2 billion ($2.7 billion).  Assuming a 1,000 MW reactor can be delivered for $4,000/Kw by 2020, that suggests CEZ's current exposure is about two-thirds of the cost.

Reducing its equity stake to 49%, or $1.96 billion, would require other investors to come up with the remaining one third, $1.3 billion plus an additional $704 million.

Getting these projects through the bid process while simultaneously raising investor funds for a state-owned utility is often the job of a trade minister. In the case of the Czech Republic, that's going to be a problem in the near term.  Martin Kocourek, who held the position until Nov 9, quit following media reports that he deposited $854,000 in his mother's investment account to hide the assets from his now ex-wife during a divorce proceeding.

The revelations come at a time when there have been a string of unrelated financial scandals involving other government officials.  CEZ's CEO resigned earlier this year when it was learned he has an investment position in a firm that sold power equipment to the utility.  The defense and environmental ministers also resigned earlier this year over the award of government contracts.

CEZ has a new CEO and the government needs a new trade minister to keep these projects moving. Otherwise, like baseball players stranded on base at the end of a fitful inning, new reactor builds at Temelin and two other sites might not score a hit with investors.

India blinks on supplier liability

Last November opposition parties gave Indian Prime Minister Singh a black eye during a visit by U.S. President Obama.  They refused to change a supplier liability law for vendors of components for nuclear power plants thus locking U.S. firms like Westinghouse and G.E. Hitachi out of the expected $150 billion market.

That was not the way things were supposed to go after U.S. President Bush supported in 2007 India's right to buy uranium from the Nuclear Suppliers Group. The idea was that once India was again able to buy fuel, it would start building reactors and U.S. vendors would get a piece of the action.

Instead, opposition parties including India's so-called "non-aligned" communists and conservative Hindu parties pushed through a law that disregarded international conventions on supplier liability.  Speeches by U.S. Secretary of State Hillary Clinton for India to change the law fell on deaf ears.

The interesting thing about legislation is that there are always implementing regulations.  This is the approach that the Department of Atomic Energy took which in its notification limits the amount and duration of claims.  The action opens India's market to U.S. nuclear component manufacturers.

The timing of the action is that the announcement was made just prior to PM Manmohan Singh arriving at the East Asia Summit in Bali where he is expected to meet President Obama.  This is clearly looks like a stand-up triple for Singh if he can show real progress.

However, a blogger for the Wall Street Journal says not so fast. He calls the whole thing a fake out and that Singh has no intention of letting U.S. firms enter India's market.  Opposition parties have complained about a "sell out" to the U.S. and are stirring up trouble with protests at two reactors sites - Jaitapur (Areva) and Koondankulam (Atomstroyexport). Work on both projects has been delayed as a result.

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Thursday, November 17, 2011

French nuclear fleet could be sunk by Socialists

An alliance with Green parties could shut down 24 reactors by 2025

Francois Hollande
The future of the 58 nuclear reactors in the French fleet of power stations may be decided in the election next May.  According the wire service reports, opposition parties composed of Socialists and Greens, if elected, would follow Germany's example and begin a massive phase out of nuclear power in France.

The results could be catastrophic for the French economy. France gets 75% of its electricity from nuclear energy.  A 50% cut in the number of operating reactors could trigger a massive wave of unemployment.

The cost of replacement power from liquefied natural gas, wind, and solar power could transform the balance sheet of businesses forcing them to swap out payroll, and jobs, to pay rapidly rising electric bills.

French industry minister Eric Besson told the Bloomberg wire service on Nov 16, "It is an unbelievable and absolute regression."  

The likelihood that Francois Hollande, the Socialist candidate endorsed by the Greens, will win the election next is not a sure thing, but his polling data suggests a strong possibility of a win.  A survey of French voters carried out last week shows him leading current French President Nicolas Sarkozy by 53% to 34% with Sarkozy having gained 3 points, the margin of error, in the past week as well.

Meeting of minds not over yet

Eva Joly
The Socialists are not 100% aligned with the Greens on the nuclear plan. The Greens want to shut down the construction work on the new 1,650 MW Areva EPR at Flamanville.

Eva Joly, a Green Party spokesperson, told wire services Nov 16 the EPR "is dangerous and and industrial and financial catastrophe."

However, Socialist spokesman Manual Valls countered that "It is out of the question to stop construction" of the EPR.  And Hollande said in a TV inerview last week he agrees the reactor should be completed and enter revenue service.

EDF is building the reactor, but has run into problems.  It is over budget and behind schedule.  French President Sarkozy announced another EPR new build for Penly last year, but work has not started on that reactor.

Another area where the Socialists and Greens disagree is on he recycling of spent nuclear fuel. Areva produces MOX fuel at La Hague for about 30 reactors woldwide. 

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Protests delay India's new nuclear build

Projects in Koodankulam and Jaitapur will be set back

Jaitapur_nuclear_plant_protestA series of protests that began in October have delayed the hot start of two Russian 1000- MW VVER reactors in the Tamil Nadu state on India's  southernmost coastline. Additional protests, some of them violent, have set back the start of construction of two French 1650- MW EPR reactors in the Maharashtra state on India's west coast some 400 km (250 miles) south of Mumbai.

In Koodankulam in Tamil Nadu, the provincial governor has supported protests by local villagers over perceived safety issues following the Fukushima crisis in Japan and also focused on the hot water discharge from the plant into shoreline fishing waters. In Jaitapur, area villagers have complained about what they say is inadequate compensation for land to be taken for the plant and displacement of their farms without having a new way to make a living.

In both locations, minority political parties have made common cause with the protesting villagers. The national government, however, has charged that anti-nuclear organizers from Greenpeace have been seen in Tamil Nadu.

Hot start-up stopped

The net effect of the protests is that all work has stopped on hot startup of the two Russian VVERs. Both reactors were to have entered revenue service in December 2011. Now the Nuclear Power Corp. of India Ltd. (NPCIL) says that the startup will be postponed to March 2012. At Jaitapur, the commissioning date for the first of two Areva EPRs has been set back by at least a year, to 2019.

The national government has been caught by surprise by the protests. In  early November, it engaged former President A.P.J. Abdul Kalam, who is from Tamil Nadu and is a former defense official, to meet with the provincial governor and representatives of protest groups. Kalam toured the Russian built plant site and pronounced it safe, much to the disappointment of the protest groups.

The chairman of India's Atomic Energy Commission, Srikumar Banerjee, said that the local protests would not be resolved with scientific facts. He said that one-on-one contacts between nuclear officials and the villagers were needed to calm everyone down.

Elsewhere, other members of India’s nuclear energy establishment debated whether the country should be importing any new foreign technology but instead rely on an indigenous design based on AECL’s CANDU reactors.

Read the full story exclusively at ANS Nuclear Cafe online now.

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Tuesday, November 15, 2011

The next generation of nuclear engineers will be raised on games

Massive multi-player experiences, and social media, are formative experiences the nuclear industry should leverage to recruit new talent

JoystickIt's no secret to the big three television networks why tens of millions of viewers age 18-35 are not watching the latest situation comedy hit or prime time drama. The reason is they are in front of a computer screen hooked up to a gaming device that talks over the Internet to many others involve in massive multi-player experiences. The competitive landscape includes sports, fantasy adventures, auto racing, and outright warfare.

The virtual game environments, and the social media networks that surround them, are as much a part of the "reality” of the players as their families, jobs, and relationships with society.

The question is why hasn't the nuclear energy industry harnessed these technologies as a way to motivate young people to seek a career in the field?

A review of accessible nuclear energy "games" on the Internet turned up a few accessible programs (list below), but none that match the vivid graphics, intense interactivity, and immersive power of anything available on an Xbox or similar device.

A modest proposal for the nuclear industry is to partner with the major engineering universities and game companies to build interactive game environments that are accessible to a first year college student. The objective would be to hook prospective engineering majors with an environment they are already at home in.

The strategy would be to offer puzzle games, with a compelling story line, that illustrate mechanical, chemical, electrical, or nuclear engineering challenges at the undergraduate level. Students learn at an accelerated pace when the educational experience is interactive and hands-on.

It's important that the games not focus solely on a complete nuclear reactor. Games that address challenges in mechanical, electrical, and chemical engineering, which support the industry, are also candidates for this strategy.

The attraction of solving the puzzle in teams is that it would parallel the experiences these young people have already had in high school with massive multi-player online environments. It would mimic social experiences they're already comfortable with.

Areva EPR By using games to illustrate the problem solving nature of engineering disciplines, the nuclear industry might have an easier time convincing undergraduates and people in technical schools to invest in a degree that leads to a job at a nuclear power plant.

In addition to the games, it would be important to build a social media environment using Facebook, Twitter, and similar tools to provide communication among the gamers and also to establish mentor relationships with nuclear energy educators.

A key competitive advantage would be to develop these nuclear engineering simulation games to run on iPads and other mobile devices. The generation now in high school is totally oriented to a mobile lifestyle. Desktop computing and land lines are grandpa's technologies.

To sum it up, the opportunity is there to make a claim on the attention span of the current 20 somethings in the country to get interested in nuclear energy, but only if the industry gets cracking now.

I’d be interesting in hearing from readers if anyone has tried this with other engineering professions.

Ted Talk

Games like World of Warcraft give players the means to save worlds, and incentive to learn the habits of heroes. What if we could harness this gamer power to solve real-world problems? Jane McGonigal says we can, and explains how.

Short list of nuclear energy games and online simulators

Nuclear Power Plant Simulator Game

Flash Nuclear Power Plant Simulator v.91 I2001-2003 Geoffrey Noles This game incorporates BASIC algorithms by Stephen R. Berggren and Ivan C. Smith. ...

Nuclear Power Plant Demonstration

A nuclear power plant simulator game written in Flash 4. Learn the basics of how a nuclear power plant works and try your hand at operating the simulator.

Swedish nuclear reactor simulator

Interactive online demonstration: Play the role of a control-room operator at Sweden's Kärnobyl nuclear power plant, and try to keep the reactor ... documentation and source code available.

Shell - Energyville; Simulate providing all forms of energy to a city

Areva EPR 1600 online simulator /

PCTRAN - Personal Computer Transient Analyzer

Consortium for Advanced Simulation of Light Water Reactors

Nuclear core simulation for iPhone

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EDF seeks to be French and not French at the same time

The state-owned nuclear power generating company seeks a more flexible identity

Henri Proglio, EDF CEO
In a series of penetrating news reports, the Financial Times (London) has cast some light on the future of Electricite de France (EDF), the french firm that runs that nation's 58 nuclear reactors. EDF is also pursuing a global strategy with plans for six new power stations in the U.K.  Challenges facing the firm fall in the unpredictable realms of politics.

In response, EDF wants to partner with other reactor vendors besides Areva in hopes of establish a new global commercial footprint not subject to the whims of voters and politicians on the domestic side of the ledger.

According to the FT articles, EDF CEO Herni Proglio is "rattled" by the prospects of an election victory next spring by Socialist candidate Francois Hollande who wants to cut France's reliance on nuclear energy. Currently, France gets 75% of its electricity from nuclear reactors.

Francois Holland
Mr. Hollande, in speeches to his socialist political supporters, has called for cutting reliance on nuclear reactors by 50%.  According to polls, Hollande has "unprecedented centerist support" among voters which is why Proglio is worried and taking action.

The problem for EDF is that it makes two-thirds of its profits from running France's nuclear reactors.  Raising new capital for future expansion to replace aging power stations is being tossed into uncertain realms by the prospects of a socialist win.  Also, the new EPR at Flamanville is running behind schedule by at least a year and has gone over budget.  It doesn't help EDF's case if the flagship project is in a tailspin.

Proglio's two-pronged pursuit of profits

So EDF is going at the problem on two fronts. First, he is telling French rate payers that turning off the nation's nuclear reactors will result in substantial increases in the cost of keeping the lights on.   He told the FT a 50% cut in nukes would result in a {e}60 billion increase in energy costs and result in massive job losses as businesses swap payrolls for electricity bills.

Second, EDF is looking overseas for work that would keep its operations profitable if the worst comes to pass at home.  To do this Proglio is unbuckling the joined at the hip relationship his firm has had with Areva.  He told the FT Nov 14 he is repositioning the company to be less French and more global in its partnerships. Unfortunately for EDF, this is not going to be a case of scooping up low hanging fruit.

He says EDF is no longer just selling power plants. Instead, EDF is in the business of building power stations and operating them regardless of the brand on the reactor.

"We need international industrial partnerships that fit with the future of nuclear, and not just a French proposal."

To achieve this vision EDF is now talking about partnerships with Rosatom or Chinese state owned enterprises to help them export indigenous designs to other countries.  He says this paradigm could extend to "any reactor in any country in any part of the world."

New CEO yes, happy to see you, no

This can't be good news for Areva which suffered through a tough relationship between EDF and its former CEO Anne Lauvergeon. Now, with Proglio's new global visions, Areva may feel the relationship will have new tests of the ability of the two firms to do business.

A key battle ground for market share is the U.K. where EDF has six sites each of which could support one or more Areva 1,650 MW EPRs. If EDF starts working with other reactor vendors, that massive new build, and the jobs and income that come with it, could be in jeopardy.

A strategy for Areva would be to convince EDF to invest in the completion of the design of a smaller 1,100 MW design reactor.  Areva has been working on one for a while in a joint venture with Mitsubishi, and pitched it to the electric utility in New Brunswick, Canada.  So far no customer has shown interest in ordering one.  Perhaps EDF would see value in referencing such as design for smaller markets like Jordan. 

Not the only player on the field

EDF's new global vision will also be tested by competition from other vendors.   Rosatom, the Russian state-owned nuclear reactor consortium, told the FT Nov 14 it plans to double its size and global market share.

Sergei Kirienko, who heads Rosatom, told the newspaper pitiful cries about the collapse of the nuclear industry since Fukushima are patent nonsense.

"We've doubled our order book," he said despite the loss of the partnership with Siemens.

The firm has orders for reactors from Turkey, China, Vietnam and is an aggressively pursuing two new reactors at CEZ's Temelin site in the Czech republic.

And there is always gas

Back in France some analysts think EDF may be over reacting to the Socialists' political rhetoric and that once in office they will recognize the reality of energy supply in France.

EDF isn't so sure. To hedge its bets the firm is making new investments in liquified natural gas supplies which will be needed to supply baseload power to keep the grid up for all those wind towers and solar panels.

The story about France and nuclear energy used to be "no coal, no oil, no  gas, no choice," which is why as a matter of state policy, EDF is still more a state-owned enterprise than an investor focused corporation.  If CEO Proglio really wants to go global, he may have to seek privatization as the next step for EDF.

That plan won't go down so well with the Socialists, but then maybe the new regime will turn out to be pragmatists.  Even so it appears EDF isn't taking any chances.

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